Unifreight completes “painful” restructuring
UNIFREIGHT Africa’s new chief executive, Robert Edward Kuipers, says the company is now in a position to sustain profitability having managed to come out from a painful restructuring exercise which started in 2015.
In a business update at the company’s annual general meeting in Harare, Kuipers said the restructuring exercise has already started to bear positive results for the current financial year.
“We undertook a huge restructuring exercise which resulted in a lot of pain and substantial once off costs, but these have already started to show signs of positivity and we are now confident to sustain business and produce a profit at year end,” he said.
Kuipers said loss from continued operations in 2015 amounted to US$3,4 million, but the company has managed to achieve a break even position as at half year June 2016.
“The discontinued operations will continue to affect our financial statements negatively, but am confident that we would have resolved issues by end of the year to give a positive result,” he said.
He said despite the baptism of fire he received due to 2015 losses, soon after his appointment, he would congratulate the management towards turning the fortunes of the company around in an extremely difficult time.
He said the company retrenched about 200 employees, and the remaining staff and management have agreed to a 20 percent cut in salaries.
In terms of the restructuring exercise, Kuipers said the company saw the successful sale and empowerment deal with Pioneer Transport, which, despite a provision on the income statement of US$900 000, forced the company to make room for further losses.
Kuipers said the company’s closure of the local Pioneer bus service and taking over of the cross border division took the company from a loss of US$1,3 million to break even position.
He however, said the company still intends to offload the cross border business. The company invested about US$3 million in equipment which include 28 new 4-tonne Isuzu vehicles, eight Scania 4 by two articulated trucks among other equipment.
Unifreight, according to Kuipers is also in the process of restructuring the engineering division, which also involves outsourcing all spares and maintenance.
He said the company will also move from a fixed cost model to a very low cost model and that will result in future savings in the region of 20 percent, which will be US$400 000 per annum. -FinX
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